Stocks were set to open higher on Wednesday ahead of the Federal Reserve interest-rate decision, retracing some of Tuesday’s losses after the Israel, Iran conflict escalated.
Futures on the Dow Jones Industrial Average added 65 points, or 0.2%. Futures for the S&P 500 also rose 0.2%, while the Nasdaq 100 looked set to gain 0.3%. Oil prices, which spiked yesterday, were falling 0.3%.
Markets retreated Tuesday as President Donald Trump sent mixed messages on whether the U.S. would become directly involved in the war as Israel continued to launch strikes. In a social media post, Trump said that Iran’s Supreme Leader Ayatollah Ali Khamenei is an “easy target,” but the U.S. won’t kill him, “at least not yet.”
That pushed oil prices higher yesterday and all three stock indexes finished a little less than 1% lower. But that was reversing early Wednesday.
Investors are all but certain that the Fed will keep interest rates unchanged at today’s meeting, but they’ll be paying close attention to comments from Chair Jerome Powell and the outlook for rates set out in the so-called dot plots of policy makers’ expectations for rates.
The last time that the Fed’s Summary of Economic Projections was updated in March, two quarter-point cuts were anticipated before the end of the year. Expectations may shift to just one reduction at this meeting. The Fed announces its decision and releases the SEP at 2 p.m. Eastern time.
Gold slipped 0.3% to $3,396 an ounce and the U.S. Dollar Index, a gauge of the greenback against a basket of peers, fell 0.3%. The yield on the benchmark 10-year Treasury bond was at 4.406%, higher than it was on Friday but slightly down from this time yesterday.